To short a stock is to sell stock one does not own. Security holdings are known as “positions”. A “long” position means one has bought the security. If you are long and then sell it, that is called “selling long.” If you do not own the security, but sell it to someone, you are “short” Short selling is permitted because it carries an implied future demand to buy the stock. The seller can borrow stock to deliver to the buyer. Then, when the price has dropped, one covers the short position by buying the stock at a lower price than where it was sold. The difference is the profit from short selling.